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W.W. Grainger (GWW)
NYSE:GWW
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WW Grainger
(NYSE:GWW)
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Rating:73Outperform
Price Target:
$1,092.00
▲(11.54% Upside)
WW Grainger's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. The company's effective leverage management and revenue growth are notable strengths. However, the stock's valuation and technical indicators suggest a cautious approach, with modest dividend yield and neutral momentum.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.
Endless Assortment Segment Growth
Robust growth in the Endless Assortment segment highlights successful diversification and expansion efforts, enhancing competitive positioning.
Digital and Technological Advancements
Investments in technology and AI improve operational efficiency and customer satisfaction, fostering sustainable competitive advantages.
Negative Factors
LIFO Inventory Valuation Headwinds
Inventory valuation challenges can pressure margins, affecting profitability and financial performance over the medium term.
Challenges in the U.K. Market
Exiting the U.K. market reflects strategic refocusing but may result in short-term disruptions and loss of market presence.
Government Shutdown Impact
Potential sales reduction due to government shutdown could affect revenue streams, particularly in the public sector.
WW Grainger (GWW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$46.83B
Dividend Yield0.9%
Average Volume (3M)285.90K
Price to Earnings (P/E)24.7
Beta (1Y)0.90
Revenue Growth4.83%
EPS Growth-3.60%
CountryUS
Employees23,500
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)10.21
Shares Outstanding47,832,245
10 Day Avg. Volume336,556
30 Day Avg. Volume285,903
Financial Highlights & Ratios
PEG Ratio4.14
Price to Book (P/B)15.35
Price to Sales (P/S)3.00
P/FCF Ratio32.83
Enterprise Value/Market Cap0.00
Enterprise Value/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
Forecast
1Y Price Target
$1,058.30Price Target Upside8.10% Upside
Rating ConsensusHold
Number of Analyst Covering12
WW Grainger Business Overview & Revenue Model
Company DescriptionW.W. Grainger, Inc. distributes maintenance, repair, and operating (MRO) products and services in the United States, Japan, Canada, the United Kingdom, and internationally. The company operates through two segments, High-Touch Solutions N.A. and Endless Assortment. It offers safety and security supplies, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance supplies, and metalworking and hand tools. It also offers inventory management and technical support services. The company serves businesses, corporations, government entities, and other institutions through sales and service representatives, and electronic and ecommerce channels. W.W. Grainger, Inc. was founded in 1927 and is headquartered in Lake Forest, Illinois.
How the Company Makes MoneyGrainger generates revenue primarily through the sale of MRO products to businesses and institutions. Its revenue model relies on a combination of direct sales, online sales through its e-commerce platform, and procurement services. Key revenue streams include product sales, subscription services for inventory management, and value-added services such as technical support and training. Additionally, Grainger has formed partnerships with various manufacturers and suppliers to enhance its product offerings and maintain competitive pricing. The company's strong focus on customer service and logistics efficiency also contributes significantly to its earnings, as it helps retain existing customers and attract new ones.
WW Grainger Key Performance Indicators (KPIs)
Any
Operating Earnings by Segment
Highlights the profitability of different business segments, providing insight into which areas are driving earnings and where there might be challenges or opportunities for growth.
Highlights the profitability of different business segments, providing insight into which areas are driving earnings and where there might be challenges or opportunities for growth.
Data provided by:
Main Street Data
Main Street DataWW Grainger Earnings Call Summary
Earnings Call Date:Oct 31, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 03, 2026
Earnings Call Sentiment Neutral
Grainger reported strong earnings and revenue growth with significant contributions from the Endless Assortment segment and continued shareholder returns. However, the company faces challenges from LIFO inventory valuation headwinds and the need to exit the U.K. market. The impact of the government shutdown also presents a potential risk to future sales.Q3-2025 Updates
Positive Updates
Strong Revenue and Earnings Growth
Grainger reported sales of nearly $4.7 billion for the quarter, up 6.1% on a reported basis or 5.4% on a daily constant currency basis, with diluted EPS increasing by $0.34 to $10.21, marking a 3.4% increase over the prior year.
Endless Assortment Segment Growth
The segment achieved sales growth of 18.2% on a reported basis or 14.6% on a daily constant currency basis, with MonotaRO and Zoro U.S. contributing significantly. Operating margins increased by 100 basis points to 9.8%.
Operating Cash Flow and Shareholder Returns
Operating cash flow was $597 million, with $399 million returned to shareholders through dividends and share repurchases.
Digital and Technological Advancements
Grainger is focusing on tech and AI to enhance customer experience and drive productivity, leveraging proprietary data for better solutions.
Negative Updates
LIFO Inventory Valuation Headwinds
Continued tariff-related LIFO inventory valuation headwinds impacted gross margins, although they were lighter than expected.
Challenges in the U.K. Market
Grainger announced plans to sell its U.K.-based Cromwell business and exit the U.K. market due to post-Brexit economic dynamics.
Government Shutdown Impact
The anticipated impact from the government shutdown is estimated to reduce sales growth, particularly affecting the public sector.
Company Guidance
During the W.W. Grainger Third Quarter 2025 Earnings Conference Call, the company reported strong financial metrics, with total company sales reaching nearly $4.7 billion, reflecting a 6.1% increase on a reported basis and a 5.4% rise on a daily constant currency basis. The company's gross margins were reported at 38.6%, while operating margins stood at 15.2%. Diluted earnings per share (EPS) increased by $0.34 to $10.21. Operating cash flow for the quarter was $597 million, enabling the company to return $399 million to shareholders through dividends and share repurchases. Despite experiencing tariff-related LIFO inventory valuation headwinds, Grainger managed to exceed its August guidance, particularly on the gross margin line. The company also announced its intention to divest its U.K.-based Cromwell business, thereby focusing on growth in North America and Japan. The updated outlook for the remainder of 2025 anticipates a daily organic constant currency sales growth of between 4.4% and 5.1%, with a diluted adjusted EPS range of $39 to $39.75.WW Grainger Financial Statement Overview
Summary
WW Grainger shows strong financial health with consistent revenue growth and effective leverage management. However, there are slight declines in net profit and EBIT margins, and challenges in free cash flow growth, indicating areas for improvement.Income Statement
WW Grainger has demonstrated strong revenue growth over the years, with a consistent increase in total revenue. The gross profit margin remains healthy, indicating effective cost management. However, there is a slight decline in net profit margin and EBIT margin in the TTM period, suggesting some pressure on profitability. Overall, the company shows robust growth and profitability trends.Balance Sheet
The company's debt-to-equity ratio has improved significantly in the TTM period, indicating better leverage management. The return on equity remains strong, showcasing efficient use of equity to generate profits. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing. Overall, the balance sheet reflects a stable financial position with room for improvement in equity financing.Cash Flow
Operating cash flow has remained stable, with a slight decrease in free cash flow growth in the TTM period. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to net income. However, the decline in free cash flow growth suggests potential challenges in maintaining cash reserves. Overall, the cash flow position is solid but could benefit from improved free cash flow growth.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.75B | 17.17B | 16.48B | 15.23B | 13.02B | 11.80B |
| Gross Profit | 6.94B | 6.69B | 6.50B | 5.85B | 4.72B | 4.24B |
| EBITDA | 2.76B | 2.90B | 2.81B | 2.40B | 1.74B | 1.22B |
| Net Income | 1.73B | 1.91B | 1.83B | 1.55B | 1.04B | 695.00M |
Balance Sheet | ||||||
| Total Assets | 8.85B | 8.83B | 8.15B | 7.59B | 6.59B | 6.29B |
| Cash, Cash Equivalents and Short-Term Investments | 535.00M | 1.04B | 660.00M | 325.00M | 241.00M | 585.00M |
| Total Debt | 2.72B | 3.18B | 2.75B | 2.71B | 2.76B | 2.62B |
| Total Liabilities | 4.89B | 5.13B | 4.71B | 4.85B | 4.43B | 4.20B |
| Stockholders Equity | 3.56B | 3.36B | 3.12B | 2.44B | 1.87B | 1.83B |
Cash Flow | ||||||
| Free Cash Flow | 1.23B | 1.57B | 1.59B | 1.08B | 682.00M | 926.00M |
| Operating Cash Flow | 2.05B | 2.11B | 2.03B | 1.33B | 937.00M | 1.12B |
| Investing Cash Flow | -801.00M | -520.00M | -422.00M | -263.00M | -226.00M | -179.00M |
| Financing Cash Flow | -2.16B | -1.18B | -1.28B | -972.00M | -1.04B | -726.00M |
WW Grainger Technical Analysis
Neutral
979.00
Price Trends
979.38
Negative
998.74
Negative
1013.38
Negative
Market Momentum
-1.28
Negative
55.34
Neutral
40.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GWW, the sentiment is Neutral. The current price of 979 is above the 20-day moving average (MA) of 962.14, below the 50-day MA of 979.38, and below the 200-day MA of 1013.38, indicating a neutral trend. The MACD of -1.28 indicates Negative momentum. The RSI at 55.34 is Neutral, neither overbought nor oversold. The STOCH value of 40.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GWW.
WW Grainger Risk Analysis
WW Grainger disclosed 24 risk factors in its most recent earnings report. WW Grainger reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
WW Grainger Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $12.63B | 20.36 | 13.06% | 0.68% | 5.28% | 1.97% | |
| ― | $46.83B | 24.70 | 48.98% | 0.90% | 4.83% | -3.60% | |
| ― | $14.92B | 28.71 | 17.61% | 3.18% | -0.71% | ― | |
| ― | £48.88B | 26.74 | 32.29% | 1.34% | 3.80% | 9.26% | |
| ― | $47.24B | 38.58 | 32.74% | 2.13% | 6.92% | 5.98% | |
| ― | $4.74B | 23.81 | 14.34% | 4.00% | -1.35% | -22.24% | |
| ― | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.